Amid a government-subsidized push to generate more of the nation’s electricity from solar and wind, one San Diego-based company has emerged as a leading developer for the next generation of renewable-energy power plants.

Since the completion of its first solar facility in 2008, Sempra Generation has forged deals to build sun- and wind-energy plants in the American Southwest, Hawaii, northern Mexico, Colorado and Indiana.

The company’s progress, watched by Wall Street and endorsed by contracts with several major utilities, comes amid a sometimes-controversial push by Washington and state government, including California, to reduce carbon emissions and reward new technology that might quench the nation’s appetite for fossil fuels.

The subsidiary of Sempra Energy is scheduled to channel $470 million into utility-scale renewable energy infrastructure projects this year, as it navigates a complex landscape of government incentives and the shifting economics of ever-cheaper solar panels.

Its fleet of power plants remains anchored by two natural-gas facilities in Arlington, Ariz., and Mexicali, Baja California, that produce 1,875 megawatts — enough to power more than a million homes.

When it comes to renewable energy, the company’s sights are focused primarily on Southern California, Arizona and Nevada, where the sun shines relentlessly and recent legislation requires utilities to boost the share of electricity obtained from renewable sources, rather than coal, gas or nuclear.

“We’re focused on where the best resources are, and then we focus on getting it to the best market,” said Jeff Martin, president and CEO of Sempra Generation. “There are 10 great locations in the world for solar, and the American Southwest is one of them.”

An attorney and West Point graduate with 20 years’ experience in the energy business, Martin has encouraged a staff of about 200 employees to look beyond traditional borders and conventions of the power industry.

Landholdings help

To drive home the point, conference rooms at the company’s 13th-floor operations center in downtown San Diego are named after famous European explorers who defied flat-lander principles — Magellan, Balboa and Columbus.

But the company’s strong start in big solar — it’s considered to be among the top five developers — owes a lot to its history of developing natural gas plants.

Existing desert landholdings near major transmission lines and substations have allowed Sempra Energy, the San Diego-based utility holding company, to rapidly move into commercial solar as the industry is born.

With its most ambitious renewable-energy projects still in the permitting and development stages, Sempra Generation counts its success in terms of long-term power purchase agreements with companies that have investment-grade credit.

Those customers include San Francisco-based Pacific Gas and Electric, Ohio-based American Electric Power, Maui Electric and others.

Skirting controversy

As solar and wind developers survey Bureau of Land Management property for opportunities, Sempra Generation has steered away from public land that can involve lengthy and costly impact reviews.

Nevertheless, two current projects — a solar plant in Arizona and a wind farm in Mexico — have exposed the company to public criticism and unexpected scrutiny.

The Mesquite Solar 1 project, under construction 40 miles west of Phoenix, received a $337 million federal loan guarantee in September under the same Department of Energy program that has become a rallying cry for Republican critics of the Obama administration’s green energy program.

The program paid for a half-billion dollar loan to Solyndra, a Northern California solar panel maker that went bankrupt and laid off 1,100 workers after receiving the money.

Sempra Generation officials say its federal loan guarantee possesses little risk because the Mesquite plant already is backed by a state-approved, 20-year power purchase agreement with PG&E, California’s largest utility.

Federal aid critical

Even on well-vetted projects, federal guarantees are seen as crucial to commercial financing, with the solar debt market still in its infancy, said Sempra Generation spokesman Scott Crider.

“This is a project that already has the long-term cash flow to support it,” he said. “It’s meeting all of the goals of the loan-guarantee program.”

Meanwhile, plans for a wind turbine installation just across the Mexican border from Jacumba are being condemned by the International Brotherhood of Electrical Workers union and some local politicians who would rather see the same investment in the United States.

California law allows for generation in Mexico to help utilities and other electricity retailers comply with producing 33 percent of their power from renewable-energy sources by 2020.

Nevertheless, state Sen. Juan Vargas, D-San Diego, has asked the Department of Energy to turn down a presidential permit for the cross-border transmission line that would connect the turbines with U.S. consumers.

“If there is no push-back, you’re not going to see these jobs on the American side,” said Vargas, who is running for the congressional seat being left vacant by Rep. Bob Filner, in a district that traverses most of California’s border with Mexico. “They can produce a kilowatt of power more cheaply on the Mexican side,” he said, citing lower labor costs and regulatory requirements.

Wind currents needed

Sempra Generation officials say the project is made viable only by the strong, sustained wind currents along the spine of a rugged, mile-high mountain range that rises abruptly from the desert floor south of the border.

That kind of wind doesn’t exist in California outside of three corridors that are already heavily developed, said Martin. Robust wind production at the site would ultimately benefit customers in San Diego, he said.

San Diego Gas & Electric, a regulated sister company to Sempra Generation, has signed a 20-year purchase agreement for electricity from the first, 156-megawatt phase of the Energía Sierra Juárez project.

Additional phases could eventually produce as much as 1,000 megawatts and line dozens of miles of ridgelines on property leased from rural communal landholding groups.

Favorable policies

Current public policies bode well for Sempra Generation and its renewable-energy competitors, as utilities feel pressure to shift away from coal-fired power plants.

But experts warn that electricity customers have yet to see the full costs of implementing California’s steep renewable-energy mandates. A political backlash is not out of the question.

“No matter how well a company does in executing renewable energy, the cost of the power production is unavoidably higher than it would be from a natural gas peaker plant or other fossil fuel resources,” said Jim Waring, president of CleanTech San Diego, a nonprofit proponent of green technology development.

Federal investment tax credits for green energy have created a temporary buffer, improving the economics of renewable-based generation and buying the industry time as new technologies become more efficient.

Many commercial solar projects rely on an investment tax credit set to expire at the end of 2016. A key U.S. incentive for large-scale wind projects, the Production Tax Credit, which can be converted into cash investments in wind projects, would expire at the end of 2012 if not renewed by Congress.

Such incentives may be reconsidered as public pressure mounts to contain the federal budget deficit and outstanding debt.

“It’s not clear that some of that tax support from the feds is going to be there over time,” said Paul Patterson of the independent research firm Glenrock Associates. “One has to wonder what the impact is going to be on the renewables sector.”